ATC100506: Report on Oversight Visit to Okhahlamba Local Municipality
REPORT OF THE SELECT COMMITTEE ON CO-OPERATIVE GOVERNANCE AND TRADITIONAL AFFAIRS ON OVERSIGHT VISIT TOOKHAHLAMBA LOCAL MUNICIPALITY – DATED 06th APRIL 2010
1. Background and Overview
1.1 The Select Committee on Co-operative Governance and Traditional Affairs, having considered the request by the National Council of Provinces (NCOP) on the 12th January 2010, to consider and report on the intervention notice invoked in terms of section 139 (1)(b) of the Constitution at Okhahlamba Local Municipality, reports as follows:
1.2 In terms of section 139(1)(b), when a municipality cannot or does not fulfil an executive obligation in terms of the Constitution or legislation, the relevant provincial executive may intervene by taking any appropriate steps to ensure the fulfilment of that obligation, including assuming the responsibility for the relevant obligation in that municipality.
1.3 In terms of NCOP Rule 101, the Office of the Chairperson of the NCOP referred the notice of intervention in the affairs of OkhahlambaLocal Municipality to the Select Committee of Co-operative Governance and Traditional Affairs for consideration and reporting. On the 19th February 2010, the Select Committee took a decision during its meeting to conduct an oversight visit to the above-mentioned Municipality on the 19th March 2010.
2. Purpose and Objectives
2.1 The main objectives of the oversight visit was to determine whether procedural requirements have been met and to verify whether the Provincial Executive has used its discretion appropriately before the Committee can approve/disapprove the intervention. Through the deliberations and interaction with internal and external stakeholders, the Committee wanted to determine how the Provincial Executive was intending to restore the fulfilment of the relevant obligations and ensure fulfilment in the long-term. The aim being to ensure that intergovernmental checks and balances aimed at guarding the integrity and efficiency of the intervention process.
3.1 The Delegation of the Committee was composed of the following Members of Parliament and Officials: Hon MH Mokgobi, Limpopo (ANC); Hon AG Matila, Gauteng (ANC); Hon DV Bloem, Free State (COPE); Mr TM Manele, Committee Secretary (Committee Section); Mr N Mfuku, Content Adviser (Committee Section); Mr V Mfuniselwa, Administration Assistant (Committee Section).
4.1 On the 24th November 2009 the KwaZulu-Natal MEC for Co-operative Governance and Traditional Affairs tabled a notice of intervention on Okhahlamba Local Municipality to the Office of the Chairperson of the NCOP. Subsequent to the tabling, a notice of intervention was referred to the Select Committee on Co-operative Governance and Traditional Affairs for consideration and reporting in terms of Council Rule 101. In compliance with the Council referral, the Select Committee resolved to undertake a fact-finding visit to the Municipality on the 19th March 2010.
4.2 In terms of section 139 (2)(b)(ii) of the Constitution, the intervention must end if the NCOP does not approve the intervention within 180 days, in this case before the end of the 24th May 2010 since the intervention began.
5. Reasons for Intervening in Okhahlamba Local Municipality
5.1 The main issues identified by the Provincial Executive to intervene in the affairs of Okhahlamba Local Municipality related to persistent or material breach of legislation; lack of financial and management accountability; serious allegations of maladministration, fraud and corruption; irregular fruitless and wasteful expenditure; unauthorized expenditures; cash flow problems and late payments of salaries. Furthermore, there was a complete disdain for the views of the opposition and the ignoring of appeals to desist from misusing political majority, by subjecting to a vote matters that had serious financial and legal consequences.
6. Appointment and Functions of the Administrator
6.1 The Administrator was appointed on the 24th November 2009 to undertake the functions in terms of Section 51 of the Municipal System Act; including development of turn–around strategy; rectification of all decisions of the Municipal Council prior to implementation; rectification of all decisions taken by Municipal Manager and section 57 managers in terms of the delegated or original authority; ensuring the implementation of Council resolution; implementation of a system to control and approve all expenditure; implementation of governance procedures and systems; implementation of financial systems, procedures and policies; implementation of Municipal Property Rates Act (MPRA), preparation of the adjustment budget for the 2009/10 financial year, and the reviewing of the municipal organisational structure.
7. Oversight Visit to Okhahlamba Local Municipality
7.1 On the 19th March 2010 the Delegation of the Committee had interactive and robust engagements with the
internal and external stakeholders of the Municipality. The main internal stakeholders the Delegation interacted with in the Municipality included the Speaker, Mayor, Chief Whip, Ward Committee Members, Councillors and the Administrator. The main external stakeholders the Delegation interacted with included members of the community and business forums and non-governmental organizations.
7.2 For the purpose of this report, the submissions made by both internal and external stakeholders are structured on the basis of the five strategic key performance areas of the local government agenda which are: Municipal Transformation; Basic Service Delivery; Local Economic Development; Municipal Financial Viability and Management as well as Good Governance and Public Participation.
(A). Municipal Transformation and Organisational Development
7.3 Administrator: The transformation and organisational development crisis reported by the Administrator involved the appointment of personnel without relevant qualifications and experience, high-turn over of Municipal Managers and Chief Financial Officers; staff employment driven by narrow political considerations; wrong application of staff placement policy resulting in wholesale promotions of staff at various levels and thinness in terms of skills and competency at managerial and supervisory levels.
7.4 Organised Labour: The municipal transformation and organisational development challenges raised by the South African Municipal Workers Union (SAMWU) representative related to the non-functionality of the labour forum and the non-implementation of labour related decisions.
(B). Basic Service Delivery
7.5 Administrator: Some of the service delivery crisis reported by the Administrator related to the huge backlogs identified in water and sanitation; stalling of housing projects; lack of clarity on how the list of beneficiaries of free basic services for electricity was compiled; poor maintenance of infrastructure and municipal buildings.
7.6 Rate Payers Association: The Rate Payers Association raised concerns related to the lack of service delivery and shortage of running water in the municipal jurisdiction, especially in areas like Tsakani. Equally, they emphasized the importance of rendering services efficiently by the Municipality.
(C). Local Economic Development (LED)
7.7 Bergville Chamber of Business: The Chamber reported that the Municipal Council did not recognized business as an important stakeholder for LED and job creation. It was indicated that political interference was highly prevalent in the supply chain management of the Municipality. Furthermore, they also divulged that the developmental approach of the Municipal Council lacked a vision, and did not have budget commitments.
(D). Municipal Financial Viability and Management
7.8 Administrator: The Administrator reported that there was serious challenges since expenditure was not backed by authentic supporting documents; there was a lot of disappearance of supporting documents; misstatements in Annual Financial Statements (AFS); lack of supporting documents on investments recorded in the AFS and Conditional Grants have been utilised for purposes other than those for which they were intended.
7.9 Administrator: The other financial viability and management crisis reported by the Administrator related to asset register which was not updated and assets not physically verifiable; individual members of staff often by-passed supply chain management processes without censure; over-expenditure on votes; blurring of segregation of roles and duties and ineffective Internal Audit and Audit Committee.
7.10 Administrator: In order to deal with the above-mentioned crisis, the Administrator reported that the turn- around strategic plan has been developed to focus on the preparation of the Annual Report in terms of section 121 of the Municipal Finance Management Act (MFMA); submission of the Mid-Year Budget and Performance Assessment by the 25th January 2010 in terms of section 72 of the Act; preparation of Budget Adjustment and identification and resolving of all obstacles to the implementation of the MPRA.
7.11 Organized Labour: In order to deal with municipal financial viability and management, the representative of SAMMU appealed to the Provincial Department to provide the Municipality with the financial assistance and the rate payers to pay for the services due.
(E). Good Governance and Public Participation
7.12 Administrator: Some of the governance related concerns reported by the Administrator included the ineffective Ward Committees and Community Development Workers (CDWs). It was also indicated that the Integrated Development Plan (IDP) of Okhahlamba LocalMunicipality has been ranked as falling amongst the worst IDPs of all municipalities in KwaZulu-Natal Province. There are indications that the same IDP has been submitted twice without review, the only change being the year of submission. Similarly, the input of the Provincial Departments and other Agencies were evidently absent - a signal of poor participation of Departments in the IDP process.
7.13 Administrator: The other governance crisis reported by the Administrator related to the non-clarification of the different roles of functionaries and officials; Intra-party and inter-party contradictions had manifested through the attempts to unseat both the Mayor and the Speaker; non-functioning of internal audit, non-functioning of the Shared Services Model with the District and the poor working relations by the Municipality with the District.
7.14 Ward Committees: Some of the governance and public participation concerns raised by Ward Committees Members related to the non–functioning of Ward Committees; lack of consultation between Councillors and Ward Committee Members; Councillors appointing people not elected by the respective communities; lack of co-operation between the Councillors and Traditional Leaders.
7.15 Organized Labour: Some of the governance concerns raised by the representatives of SAMMU related to the disfunctionality of the labour forum, as well as the implementation of its decisions.
7.16 Philakahle Working Centre: This non-governmental organisation indicated that public consultation did not exist in the Municipality, especially on consultative issues like the IDP. They recommended that the Municipal Council to immediately implement government programmes.
8. Committee Observations and Opinion
8.1 The Delegation of the Committee has observed that since the placement of the Municipality under section 139 (1)(b) of the Constitution significant progress has been made in respect of the development of a turn- around strategy; development of financial recovery plan and development of rate payers policy.
8.2 The Municipality has through the appointment of the Administrator developed a best diagnostic analytical tool focusing on the strategy; governance; finance; service delivery; human resources and capacity development support analysis.
8.3 The Municipality has put in place a plan to address irregularities related to the forensic audit investigation, criminal investigations pursued by the Hawks; disciplinary actions against the Tourism Manager, Cashier Supervisor; suspension of Director: Corporate Services; consideration of legal options to review the 99 Year Lease Agreement and the recovery of R600 000 paid as a deposit for the cemetery land.
9.1 The Committee Delegation acknowledged the varied contributions of the parliamentary staff who participated in the oversight visit in their various capacities. A word of appreciation is also extended to all the internal and external stakeholders of the municipality who interacted and had robust engagements with the delegation of the committee on matters related to the placement of the municipality under section 139 (1) (b) of the Constitution.
10.1 Having conducted the oversight visit to Okhahlamba Local Municipality and interacted with internal and external stakeholders, the Select Committee on Co-operative Governance and Traditional Affairs recommends as follows:
10.1.1 The National Council of Provinces approves the intervention as issued by the Provincial Executive Council in terms of section 139 (1)(b) of the Constitution.
10.1.2 The Administrator should fast-tract the process of appointing Section 57 Managers, the implementation of the financial recovery plan and the municipal turn-around strategy.
10.1.3 The Administrator should resolve the problems related to the non-functionality of the Ward Committees and ensure that Local Economic Development takes place through community consultation and participation.
10.1.4 The Administrator should assist the Municipality and the District in strengthening the District Inter-Governmental Relation Forum (IGR), in order to achieve co-operative governance.
10.1.5 The KwaZulu-Natal MEC for Co-operative Governance and Traditional Affairs should table quarterly progress reports to the NCOP and the Provincial Legislature on the status of the intervention in the Municipality, including challenges encountered.
10.1.6 The South African Local Government Association in co-operation with Local Government Sector Education and Training Authority should facilitate the training and capacity building for Municipal Councillors; to further deepen their understanding of the oversight role; legal framework and policies that govern the activities of the Municipality.
10.1.7 The South African Local Government Association should also facilitate an Executive Training Programme for the municipal officials.
10.1.8 The approved report by the NCOP should be shared with all the internal and external stakeholders of Okhahlamba LocalMunicipality whom the Committee Delegation interacted with during the oversight visit.
10.1.9 The Select Committee on Co-operative Governance and Traditional Affairs in co-operation with the relevant Portfolio Committee in KwaZulu-Natal Provincial Legislature would conduct a follow-up visit to the Municipality, three months after the intervention has ended in order to monitor through interaction with internal and external stakeholders, progress made in respect of the intervention in the Municipality.
Report to be considered.
No related documents